A glimpse at trends that emerged during the festive shopping season

Data released last week by major South African retail groups - including Woolworths, Clicks and TFG - and BankServ Africa confirm the predictions we made in our article published earlier this week: December was a good month for South Africa’s retail industry, but consumers remain under immense financial pressure. 

Large retailers enjoyed a staggering 91% year-on-year increase, and food outlets were slightly up (1% YoY), but clothing stores and service stations saw 16% and 11% declines respectively. Shoppers overwhelmingly prioritised the purchase of essential items such as food (often seeking out discounted food items), rather than clothing and even Christmas presents.

With no signs that our economy will start recovering soon, we examine the biggest trends that emerged over the Black Friday and festive shopping seasons last year and suggest ways our retail partners can embrace change to achieve a stellar performance in a tough market.

Ensure that Black Friday discounts are worth shopping for.

Meticulously match your mix of promotional or discounted items with macroeconomic factors and shopper aspirations and needs. Weigh these up against how they will impact your profits and sales volumes. For example, bundled or 3-for-2 promos will move more stock than straight percentage discounts on individual items. Also consider VIP discounts, personalised offers, referral discounts and free shipping.

Unleash the Christmas music earlier.

In 2023, half of all holiday shopping commenced in October or earlier, according to McKinsey. That beats November, the traditional start of the holiday spending season, when 40% of it started. If 2024 is like 2023, festive season spending will kick off early, so decide carefully when to begin and end your Black Friday promotion period, as this essentially kicks off festive season shopping for your brand.

Consider alternative payment methods.

Alternative payment methods, such as buy now, pay later (BNPL) plans like PayFlex and Pay Just Now, have replaced credit cards for billions in purchases. According to an Adobe Analytics report, BNPL as a payment method was up 42.5% YoY in November 2023, and the number of items per order rose 11% as consumers used this payment method for larger shopping carts.

Encourage giving, and saving, as a reward.

More holiday consumers used their reward programmes to meet budget restrictions for their festive season shopping in 2023. Nearly four in 10 shoppers said they planned to use loyalty points or cash back rewards to pay for gifts, a PayPal survey reported. This trend is set to continue this year, so why not host special events to encourage spending where you increase the number of points earned for every rand spent?

Rethink your preconceptions.

Millennials with families might have more expenses, but they weren’t watching their purse strings as closely as Gen Z over Christmas. One-third of young shoppers between the ages of 18 and 26 made holiday spending budgets in 2023, Bankrate reports, compared to 26% of all millennials, Gen Xers and boomers.

And while almost 25% of consumers said they would do most of their holiday shopping online, it was Gen Xers and boomers who were most likely to. According to Bankrate’s survey, 41% of these older consumers opted to shop online in the 2023 season, compared with 38% of millennials and 36% of Gen Zers.

The rise of TikTok Shop.

TikTok reported that about 150,000 brands and creators published shoppable videos on their platform during Black Friday and Cyber Monday week - and during that week, a staggering 5 million new customers made a purchase on TikTok Shop.

If you are a brand with an audience of at least 5,000 Tik Tok followers, you can start promoting products to the massive audience on that platform. TikTok Shop is still fairly new, so now is the best time to create shoppable videos as TikTok continues to push towards in-app shopping.

The pace of online shopping is picking up.

Online sales rose at nearly three times the rate of in-person sales, albeit off a much lower base: 6.3% compared with 2.2%, the Associated Press reported the day after Christmas. Although South Africa’s pace is more gradual than the rest of the world - some say even bucks the trend - it is wise to gear up for more activity to take place online, which may mean reassessing staffing and technology requirements.

Interestingly, 59% of online sales were made via smartphone over Thanksgiving weekend in the US, so freshen up how your brand’s website looks and performs on smart screens.

So there you have it, folks. Some interesting trends to consider and act on, not only for next year’s festive season, but for the rest of 2024 too. Check back here regularly for more insights, trends and recommendations!

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